Transcript of Copy of Sher-wood Case

Hockey to Canada = Baseball to AmericaDanger - Reputation'Tunnel Vision'Executive mindsetWas a leading manufacturer of ice hockey equipment Unable to keep up with updated composite sticks Sher-Wood Inc.Acquired and consolidated factoriesCreated new products and up to date modeling Issue at HandSher-Wood Inc. wants to boost hockey stick salesProduce better quality, retail price and margin for retailersDecides on outsourcing manufacturing to China Layoffs create worried employees and decrease work qualityDecrease in loyalty Less control over manufacturing plant in China time lagreal time control detect poor quality control"One of these things is not like the other..."Core StrategyApples and OrangesOne size does not fit allSherwood Drolet, Ltd.Implications of Outsourcing Demand in the ArenaGlobal hockey equipment sales has shown signs of maturity growing at 1% - 2% per yearSher-wood's external pursuits do not reflect its internal decisionsPrevious success in outsourcingRegistered hockey players in Canada are expected to shrink by 5% over the next five yearsUnlike other sports that just require a ball or bat, outfitting a recreational hockey player cost $600.00Buyers purchases product in low volumeConsumers aren't price sensitiveThree major companies controlling 80 percent of the market (Bauer, Reebok, Easton)Unique ProductsEndorsements with professional playersOverall name brandSpecialized in other sports as wellQuality over costThe CustomerCustomization: time and costsShifts in industries Textile~0%-15% savings per unitDifferent target marketConfusing and Contradictory Product's life cycle - Junior-Senior playersTarget market (low) - Executive's goalsLong-standing partnershipStrong R&D departmentSher-wood's comparing its past decisions likeDifferentiationCost LeadershipHuge volumes...lack personalizationNegative Implication of OutsourcingRisk of intellectual property theftPoor Strategy AlignmentSummaryNo viable substitutesQuestions?Daniel ChangAustin AlvermannStephanie GosnellScott VegaDanny Jung